French grains and international market conditions …French grains and international market conditions in 2016/17 October 24th, 2016 London • 2 Big picture: huge volumes Growing

• 1

French grainsand

international market conditionsin 2016/17

October 24th, 2016

London

• 2

� Big picture: huge volumes

� Growing perception: disappointing qualities

� France: from specific set of weather conditions to production incident

� French S&D balances - adjustment variable

� The French grain industry organisation: a valuable asset

Volumes VS quality:

market segmentation in 2016/17

• 3

British

cereals import needs

and countries of origin

• 4

276 109282

157

366

223

363

328

281355

557330

452

1 061

597

0

500

1 000

1 500

2 000

2 500

3 000

2012/13 2013/14 2014/15 2015/16

1 00

0 t,

July

/Jun

e

others

Can

US

PL

BG

FI

SE

DK

DE

FR

Common WHEAT imports to the UK – main origins

data: Eurostat

2,9 Mt

2,1 Mt

Main origins, adding up to 80% (or over) of total imports

« Others » : per mktg year

1,6 Mt1,4 Mt

• 5

601 572785 694

151

234

155

115

712

442218

265

169

0

250

500

750

1 000

1 250

1 500

1 750

2 000

2 250

2 500

2012/13 2013/14 2014/15 2015/16

1 00

0 t,

Jul

y/Ju

ne

others

Arg

Ukr

IE

PL

BG

RO

FR

MAIZE imports to the UK – main origins

data: Eurostat, French Customs

1,7 Mt

2,4 Mt

Main origins, adding up to 80% (or over) of total imports

« Others » : per mktg year

1,8Mt

food

1,7 Mt

• 6

The 2016/17 marketing year

on the international market

volumes, quality, external factors

• 7

World market fundamentals: WHEAT

(ending stock / use) ratio

20%22%24%26%28%30%32%34%

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

16/1

7

Sources : IGC (29/09/16), SSP (12/10/16)

all wheat

0

150

300

450

600

75007

/08

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

16/1

7

Mt Prod. End. stk Cons.

Prod (736) 747RECORD

Avail. (begin. stk + prod) 965 RECORDCons. (721) 734RECORD

End. stk (218) 231RECORD

0

3 000

6 000

9 000

12 000

15 000

18 000

21 000

24 000

27 000

30 000

33 000

36 000

39 000

42 000

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

16/1

7

Mt

Francecommon wheat

• 8

World market fundamentals: MAIZE & BARLEY

0

150

300

450

600

750

900

1050

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

16/1

7

Mt

Prod. End. stk Cons.

(ending stk / use) ratio

14%

16%

18%

20%

22%

24%

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

16/1

7

Source : IGC (29/09/16)

0

20

40

60

80

100

120

140

160

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

16/1

7

Mt Prod. End. stk Cons.

(ending stk / use) ratio

15%

18%

21%

24%

27%

30%

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

16/1

7

maize barleyProd (970) 1,027 MdRECORD

Avail. (begin. stk + prod)1,235 Md RECORD

Cons. (968) 1,019 MdRECORD

End. stk (208) 216RECORD

Prod (148) 145

Avail. (begin. stk+ prod) 174 (=)

Cons. (144) 145

End. stk (29) 29

• 9

Source : CIC

150

160

170

180

190

200

210

220

230

240

250

260

19/1

0/15

19/1

1/15

19/1

2/15

19/0

1/16

19/0

2/16

19/0

3/16

19/0

4/16

19/0

5/16

19/0

6/16

19/0

7/16

19/0

8/16

19/0

9/16

19/1

0/16

$/t,

FO

B

Argentina (12_0%), Up River

Australia ASW, Port Adelaide(SA)Black Sea Feed

Black Sea Milling

Canada 1 CWRS (13_5%), St_Law renceEU (France) Grade 1, Rouen

EU (Germany) B quality,HamburgEU (Romania) Milling (12_5%),ConstantaEU (UK) Feed, Eastern

US DNS (13_5%), PNW

US HRW (11_5%), Gulf

US SRW, Gulf

World WHEAT export prices

� Record world prod >>> from low to lower prices

� Quality concerns: widening premium

� Relative prices <<< French tight surplus >>> FR 16/17 wheat S&D balance

• 10

Source : CIC

World MAIZE export prices

� Record world prod. # upward prices

� Crop calendar North hem. / South hem. & tensions in Brazil

� US competitiveness

150155

160165170

175180185190

195200205

210215

19/1

0/15

19/1

1/15

19/1

2/15

19/0

1/16

19/0

2/16

19/0

3/16

19/0

4/16

19/0

5/16

19/0

6/16

19/0

7/16

19/0

8/16

19/0

9/16

19/1

0/16

$/t,

FO

B

Argentina, UpRiver

Black Sea Feed

Brazil,Paranagua

US 3YC, Gulf

• 11

Source : CIC

140

150

160

170

180

190

200

210

220

230

240

250

260

270

19/1

0/15

19/1

1/15

19/1

2/15

19/0

1/16

19/0

2/16

19/0

3/16

19/0

4/16

19/0

5/16

19/0

6/16

19/0

7/16

19/0

8/16

19/0

9/16

19/1

0/16

$/t,

FOB

Argentina Feed, Up River

Australia Feed, PortAdelaide (SA)

Australia Malting, Adelaide(SA)

Black Sea Feed

EU (France) Feed, Rouen

EU (France) Spring Malting,Rouen

EU (Germany) Feed,Hamburg

World BARLEY export prices

� World trade (-3,8 Mt at 25,7 Mt) / Austr. export surplus

� Chinese feed barley demand <<< internal maize policy

� Saudi state import body

� Malting quality premium

>>> impact on FR barley S&D balance

• 12

External factors

1,05001,06001,07001,08001,09001,10001,11001,12001,13001,14001,15001,1600

20/1

0/15

20/1

1/15

20/1

2/15

20/0

1/16

20/0

2/16

20/0

3/16

20/0

4/16

20/0

5/16

20/0

6/16

20/0

7/16

20/0

8/16

20/0

9/16

20/1

0/16

1 €

= ...

$

Sources : ECB, IGC, La Dépêche

Exchange rate € / $

Brexit

280

360

440

520

600

680

760

840

920

1000

12/1

0/15

12/1

1/15

12/1

2/15

12/0

1/16

12/0

2/16

12/0

3/16

12/0

4/16

12/0

5/16

12/0

6/16

12/0

7/16

12/0

8/16

12/0

9/16

12/1

0/16

poin

ts d

'indi

ce

Baltic Dry Index (BDI) Brent price

28

31

34

37

40

43

46

49

52

55

06/10/15

06/11/15

06/12/15

06/01/16

06/02/16

06/03/16

06/04/16

06/05/16

06/06/16

06/07/16

06/08/16

06/09/16

06/10/16

$/ba

ril

11 793 (20/05/08)

290(10/02/16)

0

2 000

4 000

6 000

8 000

10 000

12 00012

/10/

05

12/1

0/06

12/1

0/07

12/1

0/08

12/1

0/09

12/1

0/10

12/1

0/11

12/1

0/12

12/1

0/13

12/1

0/14

12/1

0/15

12/1

0/16

poin

ts d

'indi

ce

2921/01/16

14602/07/08

25

50

75

100

125

150

06/1

0/05

06/1

0/06

06/1

0/07

06/1

0/08

06/1

0/09

06/1

0/10

06/1

0/11

06/1

0/12

06/1

0/13

06/1

0/14

06/1

0/15

06/1

0/16

$/b

aril

1,18

0,83

1,60

0,80

0,95

1,10

1,25

1,40

1,55

1,70

04/0

1/99

04/0

1/00

03/0

1/01

03/0

1/02

03/0

1/03

03/0

1/04

02/0

1/05

02/0

1/06

02/0

1/07

02/0

1/08

01/0

1/09

01/0

1/10

01/0

1/11

01/0

1/12

31/1

2/12

31/1

2/13

31/1

2/14

31/1

2/15

1 €

= ...

$

OPEC, 28/09/16 : prod. cap >>> summit on Nov 30 thCIF prices: more expensive€ & export competitiveness

• 13

European S&D balances - 16/17 forecast

16,113,011,1

151,6

134,2

148,5

4,04,12,9

47,847,647,5

52,455,8

55,8

25,032,7

33,38,9

16,113,0

14/15 15/16 16/17

Mt,

July

/Jun

e

Begin. stk Prod.Imp. Hum. useIndus. use (excl. biofuels) BiofuelsFeed SeedsLosses Exp.End. stk

Source : EC (29/09/16)

8,6 8,6 8,6

7,1 6,6 4,9

60,2 59,660,7

37,436,3

35,9

12,7 14,28,0

6,6 4,97,1

14/15 15/16 16/17

Mt,

July

/Jun

e


15,622,8 17,5

77,6

59,758,0

9,613,3

14,0

57,958,5

60,0

4,02,2

3,0

22,817,5

9,6

14/15 15/16 16/17

Mt,

July

/Jun

e


Common wheat(grains + 1st processing)

Barley(grains + 1st processing)

Maize(grains + 1st processing)

?

• 14

The French grains S&D situation

• 15

Source : SSP (October 2016)

2016 French cereals PRODUCTION

39,6 Mt55,7 Mtsubtotal

- 0,25 Mt1,56 Mt1,81 MtDurum wheat

- 17,6 Mt54,5 Mt72,1 MtTotal cereals

- 0,9 Mt12,2 Mt13,1 MtMaize (grain, fully-ripe stage)

- 3,0 Mt10,0 Mt13,0 MtBarley

- 12,9 Mt28,0 Mt40,9 MtCommon wheat

change2016/172015/16Estimates or forecasts

Unprecedented set of wheather conditions,

Unprecedented impact on production

• 16

French cereals: export prices

Source : FranceAgriMer

145

150

155

160

165

170

175

180

185

190

195

200

205

210

215

220

20/1

0/15

04/1

1/15

20/1

1/15

07/1

2/15

22/1

2/15

08/0

1/16

25/0

1/16

09/0

2/16

24/0

2/16

10/0

3/16

25/0

3/16

12/0

4/16

27/0

4/16

13/0

5/16

31/0

5/16

15/0

6/16

30/0

6/16

18/0

7/16

02/0

8/16

18/0

8/16

02/0

9/16

19/0

9/16

04/1

0/16

19/1

0/16

$/t,

FO

B

"Superior" wheat (Rouen) Barley (Rouen) Maize (Bordeaux)

"Superior" wheat (La Pallice) Maize (Rhine)

153

186

180

190

181

$/t

As of 20/10/16

• 17

French COMMON WHEAT exports to third-countries

Sources : French Customs, Infograin, Reuters

0123456789

10111213

July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun

Mt

2014/15 2015/16 2016/17

Cumulative 2016/17 (3 months): 1,5 Mt (- 30 % y/y)

x 331 00011 614Morocco

-121 1750USA

x 6167 66227 084Asia

- 26%475 586638 417Sub-Saharan Africa

- 34%601 349914 009Algeria

- 30%1 479 2692 110 467Total 3 rd countries

Change y/y16/17 (3 m)15/16 (3 m)tonnes

• 18

French COMMON WHEAT S&D balance

2,4 3,32,8

26,1

34,5

36,9 0,7

0,40,5

0

4

8

12

16

20

24

28

32

36

40

14/15 15/16 16/17

Mt

begin. stk mktd prod. imp.4,8 4,7 4,92,8 2,84,4 5,2 5,31,6 1,6 1,6

8,0 7,8 6,4

2,83,3

2,4

3,0

12,6

4,711,4

0

4

8

12

16

20

24

28

32

36

40

14/15 15/16 16/17

end. stk

3rd-countries exp.

EU exp.

flour exp.

other dom. use

alcohol

feed

starch

milling (dom.)

P : 28,0

P : 37,5P : 40,9

� the 15/16 record, the 16/17 incident

� beginning stock > prev. year

� domestic mkt & intra-EU exports

� lower competitiveness to 3rd-countries


• 19

French BARLEY exports to third-countries

Sources : French Customs, Infograin, Reuters

0,0

0,4

0,8

1,2

1,6

2,0

2,4

2,8

3,2

3,6

4,0

4,4

4,8

Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May JunMt

2014/15 2015/16 2016/17

x 428 098190Algeria

x 358 01319 315Morocco

-59 2330Saudi Arabia

- 83%320 6831 869 737China

- 68%629 3521 937 972Total 3 rd countries

Change y/y16/17 (3 m)15/16 (3 m)tonnes

Cumulative 2016/17 (3 months): 0,6 Mt (-68% y/y )

• 20

French BARLEY S&D balance

1,1 1,1 1,3

8,5

10,9

10,0

0

2

4

6

8

10

12

14/15 15/16 16/17

Mt

begin. stk mktd prod. imp.

1,0 1,0 1,3

1,6 1,4 1,5

3,0 3,0 3,0

1,11,3

4,63,6

1,6

1,8

0

2

4

6

8

10

12

14/15 15/16 16/17

ending stk

3rd-countries exp.

EU exp.

malt exp.

other dom. use

feed

hum. & indus.(dom.)

P : 10,0P : 11,7

P : 13,0

� better priced in compound feed

� Chinese feed demand: (14/15 & 15/16) VS 16/17

� intra-EU exports: unaffected

� potential +Source : FranceAgriMer

• 21

French DURUM WHEAT S&D balance

0,1 0,1 0,2

1,4

1,7

1,4

0,2 0,20,05

0,0

0,3

0,6

0,9

1,2

1,5

1,8

2,1

14/15 15/16 16/17

Mt


0,46 0,45 0,45

0,16 0,160,16

0,320,50

0,2

0,630,72

0,95 0,17

0,09 0,17

0,10

0,0

0,3

0,6

0,9

1,2

1,5

1,8

2,1

14/15 15/16 16/17

closing st.

third-countriesexp.

EU exp.

products exp.

others

feed

semolina

P : 1,8

P : 1,6P : 1,5


� potential mkt prod +

� durum wheat use in compound feed

� breakdown 3rd-countries exports / intra-EU

� Canadian quality

� « durum wheat recovery plan »: continuing the effort

• 22

French MAIZE S&D balance

2,4 2,53,0

10,8

16,2

12,1

0

2

4

6

8

10

12

14

16

18

20

14/15 15/16 16/17

Mt


2,3 2,3 2,3

3,7 2,8

0,50,5 0,5

7,5

5,64,8

0,4

0,40,3

3,0

2,4

2,32,5

0

2

4

6

8

10

12

14

16

18

20

14/15 15/16 16/17

closing st.

third-countries exp.

EU exp.

semolina exp.

other dom.uses

alcohol

feed

starch

P : 12,2

P : 18,0

P : 13,1

� grain, fully-ripe stage maize only

� production forecast

� relatively expensive in compound feed

� EU exports: as much as available


• 23

French grains harvest:

the 2016 incident

• 24

French 2016 harvest: a yield story

200

300

400

500

600

00/0

1

02/0

3

04/0

5

06/0

7

08/0

9

10/1

1

12/1

3

14/1

5

16/1

7

1 00

0 ha

4 250

4 350

4 450

4 550

4 650

4 750

4 850

4 9505 050

5 150

5 250

96/9

7

98/9

9

00/0

1

02/0

3

04/0

5

06/0

7

08/0

9

10/1

1

12/1

3

14/1

5

16/1

7

1 00

0 ha

5,2 Mha

(5,4 Mha in 1935)

Durum wheat area

2015: + 11%

2016: + 10%

Common wheat area

Source : FranceAgriMer, SSP

0

1020

30

4050

60

7080

90

00/0

1

01/0

2

02/0

3

03/0

4

04/0

5

05/0

6

06/0

7

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

16/1

7qx /

ha

0

6 000

12 000

18 000

24 000

30 000

36 000

42 000

1 000 t

prod yield

Common wheat

Production

40,9 Mt (2015) >>> 28,0 Mt (2016)

Yield

7,9 t/ha (2015) >>> 5,4 t/ha (2016)

• 25

French COMMON WHEAT exports – sustained demand

7,8 Mt

12,6 Mt

20,4 Mtrecord

0

3

6

9

12

15

18

21

00/0

101

/02

02/0

303

/04

04/0

505

/06

06/0

707

/08

08/0

909

/10

10/1

111

/12

12/1

313

/14

14/1

515

/16

Mt UE pays tiers total

0

1

2

3

4

5

6

7

8

9

10

11

00/0

1

01/0

2

02/0

3

03/0

4

04/0

5

05/0

6

06/0

7

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

Mt

UE

Source : FranceAgriMer d’après Douanes françaises

0123456789

10111213

00/0

1

01/0

2

02/0

3

03/0

4

04/0

5

05/0

6

06/0

7

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

Mt

pays tiers

• 26

French BARLEY exports – ability to adjust

3,0 Mt

4,6 Mt

7,7 Mtrecord

0

1

2

3

4

5

6

7

8

00/0

101

/02

02/0

303

/04

04/0

505

/06

06/0

707

/08

08/0

909

/10

10/1

111

/12

12/1

313

/14

14/1

515

/16

Mt

UE pays tiers total

0,00,51,01,52,02,53,03,54,04,5

00/0

1

01/0

2

02/0

3

03/0

4

04/0

5

05/0

6

06/0

7

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

UE

Source : FranceAgriMer d’après Douanes françaises

0

1

2

3

4

5

00/0

1

01/0

2

02/0

3

03/0

4

04/0

5

05/0

6

06/0

7

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

pays tiers

• 27

0

5

10

15

20

25

30

35

40

96/9

797

/98

98/9

999

/00

00/0

101

/02

02/0

303

/04

04/0

505

/06

06/0

707

/08

08/0

909

/10

10/1

111

/12

12/1

313

/14

14/1

515

/16

Mt

common wheat maize barley durum wheat

French cereals exports (grains & 1st processing)

Source : FranceAgriMer from French Customs

• 28

France / UK:

Interdependent markets

• 29

The importance of the UK market for French cereals

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

3 500 000

4 000 000

4 500 000

UE

BL

NL

ES IT DE

UK PT

ton

s

maize barley wheat durum

4,3 Mt 4,2 Mt3,7 Mt

1,7 Mt1,4 Mt

0,7 Mt0,8 Mt

data: French customs

0

300

600

900

1 200

1 500

1 800

2 100

ES

NL

BE

UK

DE IT IE

SW

ITZ

.

MO

RO

C.

SO

UT

HK

OR

..

maize Main maize markets(all countries)

Main cereals markets

within the EU

• 30

Exports of French grains to the UK

645

799

570593

119

234351547

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

00/0

1

01/0

2

02/0

3

03/0

4

04/0

5

05/0

6

06/0

7

07/0

8

08/0

9

09/1

0

10/1

1

11/1

2

12/1

3

13/1

4

14/1

5

15/1

6

1 00

0 t

maize wheat barley durum

� 5 y av. Maize: 622 kt � 2016/17 (fcst) 575 kt

Wheat: 270 kt 100 kt

Barley: 8 ky

Durum: 49 kt

• 31

French maize: crop condition

yield prospects

Weekly updatehttps://cereobs.franceagrimer.fr

New adm. regions

• 32

French maize: crop progress

Area harvested

Weekly updatehttps://cereobs.franceagrimer.fr

New adm. regions

• 33

FranceAgriMerMORE INFORMATION on our website

www.franceagrimer.fr

NEWSLETTERhttp://www.franceagrimer.fr/newsletter/subscribe

CROP CONDITIONShttps://cereobs.franceagrimer.fr

STATISTICAL DATAhttps://visionet.franceagrimer.fr

Documents

French grains and international market conditions …French grains and international market conditions in 2016/17 October 24th, 2016 London • 2 Big picture: huge volumes Growing